TechFlow news, July 28 — According to Jinshi Data, Hu Zhihao, researcher at the Institute of Finance of the Chinese Academy of Social Sciences and deputy director of the National Institute of Financial Development, wrote in an article published in Economic Daily that as early as 2017, during its early development stage, USDT had already faced a crisis of confidence due to doubts over the authenticity of its reserves. Even USDC, known for its "transparent reserves and strong compliance," experienced a run in March 2023 because part of its reserve assets were held at Silicon Valley Bank, which subsequently collapsed. If even regulated stablecoins face such risks, algorithmic stablecoins and their various "death spirals" are even more concerning. This forces us to seriously recognize that stablecoins, performing partial monetary functions, must be subject to appropriate regulation due to their public good characteristics. Regarding the current surge in interest around stablecoins, we should neither ignore it nor rush in blindly. Instead, with a clear understanding of the nature of stablecoins, we should maximize benefits while minimizing risks and actively foster a healthy ecosystem that supports the sound development of the digital economy.
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